Dilbert on Market Manipulation

Scott Adams of Dilbert fame recently said he thought the stock market was due for a 20% slide. Our friends at Business Insider followed up to see why. Here’s Scott’s response:

Rob Wile at Businessinsider.com asked me to clarify my prediction of a 20% stock market correction in 2013. (See my post below.) So I tapped out the following message on my smartphone:

—- Start —-

“I’m glad you had the wisdom to get a cartoonist’s opinion on global financial markets.

The 20% estimate is based on the fact that 20 is a big round number and more likely to happen than 30%. I don’t like to over-think these things.

My reasoning is that the people at the highest levels of finance are brilliant people who chose a profession with the credibility of astrology. And they know it. Then they sell their advice to people who don’t know it. So that’s your cast of characters.

Now consider that the characters – who are literally geniuses in many cases – have an immense financial motive, opportunity, and a near-zero risk of getting caught. How do you think that plays out?

We can only give a guess of the odds that the market is being manipulated. So I ask myself: How often does the fox leave the hen house because he feels that taking an egg would be wrong?

If you have a different answer from mine, I applaud your faith in human nature.”

—– End —–

Personally, I think it’s funny if a bit overly cynical. Remember, of course, that the super geniuses are also battling each other which brings a certain level of accountability to any attempts at manipulation.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last nine years. (more)